Gold powers ahead as stocks pause after tech boost: Markets Wrap
by Andre Janse van Vuuren
Gold’s unprecedented rally pushed ahead on fresh efforts by China to bolster its role in global bullion markets. Stocks paused a rally that lifted the S&P 500 to yet another high.
Bullion powered beyond $3,770 an ounce, putting the metal on track for its best month since 2020. The advance gained fresh momentum on Tuesday after Bloomberg reported that the People’s Bank of China is seeking to become a custodian of foreign sovereign reserves, courting friendly countries to buy bullion and store it within its borders.
US stock futures traded indecisively early on, echoing the pattern of the past two sessions that ultimately gave way to extended rallies. Nvidia Corp. slipped 0.6% premarket after Monday’s jump.
Investors are rushing to gold as the prospect of rapid US interest rate cuts enhances the appeal of non-interest-bearing assets. The metal is also drawing haven demand amid geopolitical upheaval and pressure on the Federal Reserve from the Trump administration to lower rates, stocking fears about inflation.
Traders are awaiting fresh Fed signals ahead of a speech by Chair Jerome Powell on Tuesday as earnings season looms as the next big test for stocks. Coming up as well is the first of three short-term debt auctions, beginning with a $69 billion sale of two-year notes.
“The cross-asset landscape is defined by the duality of tech-driven sentiment, embodied by Nvidia’s outsized role in AI, and policy scrutiny over Fed independence,” wrote Pepperstone research strategist Ahmad Assiri. “Equities continue to enjoy a positive tilt, the dollar struggles to find upside traction while gold has cemented itself as the market’s most compelling anchor.”
European stocks rose 0.5% as data showed the euro area’s private sector expanding at the fastest pace in 16 months, with German services outperformance offsetting a slump in France. The yield on 10-year US Treasuries slipped two basis points to 4.13% as global bonds climbed. The dollar steadied, with major currencies little changed.
Corporate News:
- China Vanke Co. is in talks with major domestic creditors to cut borrowing costs on private debt worth tens of billions of yuan, as the embattled developer seeks to ease liquidity stress, according to people familiar with the matter.
- Orsted A/S shares surged after a US judge ruled construction can continue on a nearly completed wind farm off the coast of Rhode Island, quashing an effort by the Trump administration to halt the project.
- Zijin Gold International Co., which is currently taking orders to raise $3.2 billion in the world’s biggest initial public offering in months, may have to delay its trading debut in Hong Kong next week because of super typhoon Ragasa.
- Huawei Technologies Co. openly admits its silicon can’t match Nvidia Corp.’s in raw power and speed. So to pack the same punch, China’s national champion is counting on its traditional strengths: brute force, networking, and policy support.
Some of the main moves in markets:
- The Stoxx Europe 600 rose 0.5% as of 10:06 a.m. London time
- S&P 500 futures were little changed
- Nasdaq 100 futures were little changed
- Futures on the Dow Jones Industrial Average were little changed
- The MSCI Asia Pacific Index rose 0.1%
- The MSCI Emerging Markets Index rose 0.1%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was unchanged at $1.1803
- The Japanese yen rose 0.1% to 147.56 per dollar
- The offshore yuan was little changed at 7.1148 per dollar
- The British pound fell 0.1% to $1.3498
Cryptocurrencies
- Bitcoin rose 0.3% to $113,233.54
- Ether rose 0.7% to $4,213.93
Bonds
- The yield on 10-year Treasuries declined two basis points to 4.13%
- Germany’s 10-year yield was little changed at 2.75%
- Britain’s 10-year yield declined two basis points to 4.69%
Commodities
- Brent crude fell 0.3% to $66.35 a barrel
- Spot gold rose 0.8% to $3,777.56 an ounce
This story was produced with the assistance of Bloomberg Automation.
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